As part of the 2020-21 federal budget, the government has introduced the “Your Future, Your Super” reform package. These reforms include measures to improve the superannuation system, estimated to save Australians $17.9b over 10 years.
The measures outlined in the “Your future, Your Super” reforms will make it easier for superannuation members to choose the right well-performing product for them. Super funds with poor performance will be held accountable, and the reforms allow for increased transparency and accountability of super funds.
As part of the reforms, superannuation stapling will be implemented on 1 November 2021. This will enable members superannuation accounts to follow them as they change jobs.
According to the productivity commission, approximately one-third of superannuation accounts are inadvertently created and become zombie accounts. When initially entering the workforce, people will often choose a default superannuation fund provided by their employer. When they change jobs, their new employer may select another default superannuation fund if the employee does not nominate a super fund. Transferring their superannuation balances to the new fund is often overlooked and results in multiple unused accounts. The savings in these abandoned accounts are often consumed by fees.
Under the new reforms, superannuation stapling will ensure that a member’s superannuation account follows them when they start a new job; they will no longer default to the employer’s nominated fund. Members will remain with their existing fund unless they nominate an alternate fund; helping save money by avoiding fees on duplicate accounts. This will eliminate zombie accounts and drive better outcomes for members.
Now is a great time to start reviewing your superannuation. You can check the status of your super through the ATO website in the myGov portal and get help to transfer your super into one consolidated account. The new interactive online tool “YourSuper Comparison Tool” is available through the ATO. It’s an easy way to compare MySuper funds select the right super for you.
For more information, see https://www.ato.gov.au/Calculators-and-tools/YourSuper-comparison-tool/